From the Editor Property Council Report and HIA Research on Negative Gearing. The Property Council of Australia’s analysis of the latest Australian Tax Office statistics show that those claiming negative gearing benefits included 83,000 clerical workers, 62,000 teachers and child carers and 12,300 emergency service workers. Hairdressers, sales assistants, transport workers and cleaners are among those who have negatively geared their investment properties. In total, the figures from 2011-2012 point to 325,585 in working-class roles. A total of 91 per cent of those claiming negative gearing deductions had one or two investment properties and were not property barons, Property Council of Australia executive director Nick Proud said. “It seems fairly crystal clear that we have a significant number who earn around or under $80,000 that have one property,” he said. “Negative gearing provides an opportunity for average working Australians to save to get ahead.” Prime Minister Tony Abbott ruled out any changes to negative gearing, saying he didn’t want to start the tax reform debate by increasing taxes. “The reality is in the tax figures and it’s the reason the PM ruled out [changing negative gearing] in one word,” Mr Proud said. The report notes that the ATO statistics of taxable income are calculated after the negative gearing benefit has been applied. And, according to research by The Housing Industry Association, making changes to negative gearing would take its toll on housing investment, affordability and living standards. “Independent research has found that changing residential negative gearing would reduce housing affordability, and under the current housing policy settings, would lower Australian living standards,” said the HIA’s executive director, industry policy and media, Graham Wolfe. “New housing is one of the most highly taxed sectors in the economy, and the removal of negative gearing would only make that situation worse and discourage investment.” Mr Wolfe said that a wide range of demographics would be affected by any changes. “It is important to remember that negative gearing is not the domain of so-called ‘wealthy investors’. Official taxation statistics for 2011/12 show that over 79 per cent of those with a rental investment property have a total income less than $100,000 and around three quarters earn less than $80,000.” He said negative gearing promotes private investment in the rental market, which stimulates economic activity and takes the pressure off social housing and the public purse. “With an ageing workforce and future pressure on services, policy settings such as negative gearing that promote wealth creation and self-sufficiency in retirement should be promoted,” said Mr Wolfe. A property is negatively geared when the costs of owning it – interest on the loan, bank charges, maintenance, repairs and depreciation – exceed the income it produces. The benefit of negatively geared investments has allowed many ordinary working class Australians to invest in property and take control of their financial destiny. Australian Residential Property Planners

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